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A delivery van jumped the curb on a bustling Chinatown street yesterday and plowed through a group of preschoolers as they strolled single file holding a walking rope while returning from a library – killing two of the youngsters and critically injuring another.

The freak accident occurred at around 11:30 a.m., when the driver of the gray van hopped out to make a delivery on East Broadway and accidentally left it in reverse instead of park, authorities.

The vehicle began to roll backward and veered across the street through a no-standing zone where it mounted the sidewalk, crushing the three kids.

“It went up on the sidewalk and pinned the kids there. It’s just days before the Chinese New Year and the streets were packed. It was insane,” said witness Anthony Amoroso.

The children were among a group of 3- and 4-year-olds from the Red Apple Child Development Center on Market Street who were returning to the center from a public library on East Broadway.

A woman who was with the children immediately began screaming.

“She was screaming for help. She was stunned. I started to cry,” said Katherine Montalvo. “I ran over, and there was a lot of blood. One child was like an accordion, crushed up in a ball. They were hit so hard, they were on the floor. The children weren’t moving.”

Hayley Ng, 4, was declared dead at the scene. The two others were taken to New York Downtown Hospital, where Diego Martinez, 3, died an hour later. A third child, Emma Olsen, 4, who police initially said was in critical condition at Bellevue Hospital, was released yesterday with just three stitches to her forehead and was recovering at home, her mother said. Another 11 children and two adults were hit and taken to Bellevue, where they were treated for minor injuries and released.

The van’s driver, Chao Fu, 52, of Sunset Park, Brooklyn, who works for the Wall Street-area restaurant China Chalet, remained at the scene. “He was in a state of shock. He couldn’t even move,” witness Pamela Leitstein said.

Chao, who has a clean driving record, was taken to the Fifth Precinct station house for questioning. A blood-alcohol test came up negative. No charges were filed as of late yesterday, but police are continuing to investigate.

A manager at the restaurant called it “a tragic situation,” but insisted Chao is a “good man.”

At the center, stunned employees were ashen-faced. “All of us at Red Apple Child Development Center are stunned and deeply saddened by this tragic accident,” said director Xiaoping Fan. “We are doing everything possible to provide support to our students, parents, and their loved ones.”

Liana Flores, 34, picking up her daughters later in the day, said everyone at the center appeared to be in shock. “The kids are napping, and the teachers look like they are in tears,” she said.